EUR/USD falls below 1,1600 after good US retail sales data.

• The EUR/USD falls below 1,1600 while the US dollar is widely strengthened.
• The US retail sales in June exceed expectations, increasing an intermencing 0.6%.
• EUROZONA inflation remains firm in June, with a general CPI at 2.0% and an underlying CPI in 2.3%, coinciding with expectations.

The Euro (EUR) extended its decline against the US dollar on Thursday, pressed by a stronger dollar and optimistic economic data from the US weighing on common currency.

The EUR/USD remains defensive near the key psychological level of 1,1600 during the American negotiation session. At the time of writing, the PAR RONDA 1.1586, falling approximately 0.50% in the day while the sellers maintain control after a series of strong US data publications.

A new US economic data lot on Thursday painted a continuous strength panorama in consumer activity and a stable labor market. June retail sales increased an intermensual 0.6%, exceeding the expectations of a 0.1% increase and bouncing the sharp fall of May of -0.9%. Underlying retail sales, which exclude cars and gasoline, also rose 0.5%, improving from a 0.2% increase the previous month.

Initial unemployment subsidy applications for the week were 221,000, below the planned 235,000, indicating continuous stiffness in the labor market. But the biggest surprise came from the manufacturing index of the Fed of Philadelphia, which jumped to 15.9 in July from -4.0 in June, well above the expectations of -1. The strongest data of what was expected to reinforce the expectations that the Federal Reserve could maintain high interest rates for longer, promoting the US dollar and weighing on important peers, such as the euro.

In the front of the Eurozone, the inflation data published earlier in the day offered little relief for the euro. The Consumer Price Index (CPI) general rose 2.0% year -on -year in June, in line with the expectations and the objective of the European Central Bank (ECB). The underlying IPC, which excludes food and energy, also remained stable at 2.3% year -on -year. While the inflation of services remained high, the continuous weakness in energy prices helped limit the wider price pressures. The data reaffirmed the expectations that the ECB will probably keep the stable rates at its next week, especially as inflation shows signs of stabilization.

Meanwhile, the markets remain focused on commercial developments, with persistent optimism that an agreement could be reached between the US and the EU before August 1. The EU Chief of Commerce, Maroš šefčovič, is currently in Washington for urgent conversations with US officials, but uncertainty remains high. The perspective of an increase in tariffs has added another layer of risk for the euro, especially as investors weigh the possible economic repercussions for the export sectors of the block.